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Company update: Nutreco

First half 2009 operating profit of Dutch animal feed group Nutreco fell by half on weak demand for animal feeds, but a projected second-half improvement pushed its shares higher.

Half-year earnings before interest, tax and amortisation (EBITA) fell to €41.6 million (-49.2%) from €82 million a year ago. Sales at Nutreco fell 8.5% to €2.13 billion.

The major part of the decline was due to loss in feed volume (-7%) and price reductions (-1.5%).

Nutreco, which had warned investors in April that it was facing half-year declines in sales and profit, blamed the drop on its European Compound feed unit due to a one-off charge of about €20 million, which resulted in a €13 million loss for the unit.

Net profit for the first-half fell 76% to €12.3 million, compared with €51.3 million a year earlier.

Back into profits

Nutreco said in a statement that the business would return to profitability in the second-half and would produce "marginal profitability" for 2009.

"Demand for food will increase again as the global economies recover and population numbers rise," Nutreco Chief Executive Wout Dekker said in a statement.

Nutreco also said its recent acquisition of 12 compound feed plants of Cargill in Spain and Portugal would help it win market share.